Canara Bank showing signs of breakout from long consolidation phase: Rupak De

“A bullish rounding bottom formation has been formed, further confirming the positive outlook for the stock. This pattern indicates a potential reversal in the trend from bearish to bullish,” says the analyst who has a target price of Rs 355 and Rs 370 on the counter.

Edited excerpts from a chat:

Nifty has now been scaling new peaks every other day. Are the charts giving overbought signs?
On Thursday, the Nifty reached another all-time high after two days of consolidation, indicating a breakout in the upward direction. The overall trend appears to be positive as the index is comfortably sitting above a key short-term moving average (50DMA). Additionally, the weekly RSI has given a swing high breakout, which again points towards rising bullish momentum.

However, a non-stop rally of 900 points from 18600 level and a PCR ratio of around 1.50 suggest a slightly overbought condition for the market. The immediate resistance is visible at 19500; a failure to move above 19500 on a sustained basis might call for profit booking in the market. On the other hand, a decisive breakout above 19500 may take the index towards 19725/20140. Support on the lower end is pegged at 19300/19200. The current trend is likely to remain in force as long as it remains above 19200.

PSU bank PNB surprised with an upside of around 17% this week. What would be your trading strategy in the stock going forward?
The stock has successfully surpassed the previous swing high on a weekly closing basis, indicating a strong upward momentum. Additionally, it is maintaining its position above a crucial moving average, further affirming the positive trend. The RSI is displaying a bullish crossover and is continuing to rise, suggesting increasing bullishness in the market. The immediate support level for the stock is at Rs 54, while the resistance levels are identified at Rs 70 and Rs 82.Not just PNB, even the Nifty PSU Bank index ended the week 8.5% higher. How do you read the rally and are there any stocks that have further steam left?
PSU bank stocks have experienced an impressive rally in recent days, demonstrating strong performance. The index has surpassed the previous consolidation level, indicating a breakout in the upward direction. Additionally, it has sustained its position above a critical moving average, reinforcing the positive trend. This suggests that there may be further upside potential in the PSU Bank sector. Therefore, any dips in this space are likely to present buying opportunities for investors.

TCS and HCL Tech are going to announce their June quarter numbers on July 12. What should be the trading strategy ahead of the results?
TCS has recently been consolidating its price after a double bottom breakout on the daily chart. The expansion of the outside Bollinger bands indicates the potential for a wider price range in the future. In the short term, as long as the stock remains above Rs 3,240, it is expected to continue moving higher. On the upper end, there is a possibility for the stock to reach around Rs 3,500.

HCL Tech has recently broken below its trendline, indicating a bearish movement in the stock. Additionally, it has fallen below the middle Bollinger Band, further confirming the negative sentiment. On the downside, there is a possibility for the stock to decline further towards the level of Rs 1,110. The resistance level is identified at Rs 1,181, suggesting a potential barrier for any upward movement.

Eicher Motors was the top loser during the week within the BSE500 pack. Does the chart indicate more selling ahead?
The stock has experienced a significant decline of 11% in the past five days. Furthermore, it has fallen below a critical moving average, signaling a bearish trend. The RSI has also shown a bearish crossover, further supporting the negative sentiment. However, the stock has reached a near-term support level of 3184 on a closing basis. If the stock can avoid falling back below 3184 in the near term, there is a possibility of a recovery in its price.

Share 3-4 stocks that you would recommend buying at this stage.

Buy Glenmark at Rs 690. Target price: Rs 730. Stop loss: Rs 674
The stock has made a significant upward move, surpassing the previous swing high. Moreover, it is maintaining its position above a crucial moving average, indicating a positive trend. The RSI is displaying a bullish crossover, further supporting the bullish sentiment. The immediate support level for the stock is at Rs 674, while the resistance level is identified at 730

Buy Canara Bank at Rs 333. Target price: Rs 355/370. Stop loss: Rs 320
Canara Bank is currently showing signs of a potential breakout from a long consolidation phase. This breakout indicates a shift in market sentiment and suggests a bullish undertone for the stock.

A bullish rounding bottom formation has been formed, further confirming the positive outlook for the stock. This pattern indicates a potential reversal in the trend from bearish to bullish.The momentum indicator RSI has given a breakout from a falling trendline, further validating the change in momentum to the upside.In terms of support and resistance levels, the lower end support for Canara Bank stands at Rs 320, which is expected to provide a foundation for the stock. On the upside, the potential upside targets for the stock are Rs 355 and Rs 370.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)